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Winner of the 2014 Case Centre Award in the category of Marketing.

This case introduces the concept of inbound marketing, pulling customer prospects toward a business through the use of Web 2.0 tools and applications like blogging, search engine optimization, and social media. Students follow the growth of HubSpot, an entrepreneurial venture which, in its quest for growth, faces significant challenges including: developing market segmentation and targeting strategies to decide which customer to serve and which to turn away, configuring pricing strategies to align with the value delivery stream customers experience, and determining whether inbound marketing programs can generate enough scale or whether traditional outbound marketing methods need to be employed to accelerate growth.

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To explore the opportunities and challenges presented by an emerging Web 2.0 inbound marketing model of marketing communications pertaining to segmentation and targeting, pricing, and driving growth for an entrepreneurial start-up.

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The Customer Lifetime Value Tutorial teaches students how to calculate a customer's lifetime value, allowing them to prioritize your marketing and product development resources on the customers that will provide the biggest returns. This tutorial allows students to manipulate the levers that determine a customer's lifetime value - providing insight into how to maximize the value each type of customer delivers. The relationships a company has with its customers are one of its most valuable assets, and understanding the value of those customer relationships is key to managing them well over time. But not all customers are created equally, and figuring out how much value each customer adds to the bottom line allows managers to be most efficient with marketing and product development investment. The Customer Lifetime Value tutorial includes: a brief tutorial that walks students through the concepts and calculations; guidance for gathering data to plug into the tool; and a pre-designed, yet fully customizable PowerPoint presentation that allows students to share their results.

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The Market Sizing Tutorial helps students turn raw market data into a clear analysis that can inform product development and marketing plans. It helps students gather the data needed to size the market, then it helps students use the data to make confident projections, and finally, it helps students use the data to help build a strategy. The Market Sizing Tutorial includes: a brief tutorial that walks students through the process and calculations; instructions for gathering market data to plug into the tool; and the results of your data analysis in a shareable PowerPoint.

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The Pricing for Profit tutorial helps students confidently arrive at the most profitable price by guiding them through a series of questions: How much does it cost to produce each product you sell? How are your competitors' products priced, and how valuable is your product or service relative to those competitors? How many customers will buy your product at various price points? What price maximizes your profitability? The Pricing for Profit Tutorial will help students turn raw data into a clear analysis that will inform pricing decisions. The Pricing for Profit Tutorial includes: a brief tutorial that walks students through the process and calculations; instructions for gathering pricing data to plug into the tool; and the results of students' data analysis in a sharable PowerPoint. The tool provides a systematic approach to determining the most profitable price for products and services.

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For teaching purposes, this is the case-only version of the HBR case study. The commentary-only version is reprint R1210Z. The complete case study and commentary is reprint R1210K.

SparkPlace is a two-year-old business with a hot new product: software that manages and measures the effectiveness of permission-based marketing campaigns for social media. The company is in the process of deciding on which of two customer segments to focus its strategy. Each segment has demonstrable advantages, but developing the product for and marketing to both segments simultaneously could pose big challenges. Is the argument against being "all things to all people" a valid one? If so, which customer segment should SparkPlace target? Or is there a single strategy that can capture the potential value of both types of customers without draining the company's resources? These questions are at the heart of this fictionalized case by Jill Avery, of the Simmons School of Management, and Thomas Steenburgh, of the University of Virginia's Darden School of Business. Expert commentary comes from regular HBR contributor Roger Martin, of the University of Toronto, and from Mike Volpe, chief marketing officer at HubSpot, the company on which SparkPlace is based.

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This HBR Case Study includes both the case and the commentary. For teaching purposes, this reprint is also available in two other versions: case study-only, reprint R1210X, and commentary-only, R1210Z.

SparkPlace is a two-year-old business with a hot new product: software that manages and measures the effectiveness of permission-based marketing campaigns for social media. The company is in the process of deciding on which of two customer segments to focus its strategy. Each segment has demonstrable advantages, but developing the product for and marketing to both segments simultaneously could pose big challenges. Is the argument against being "all things to all people" a valid one? If so, which customer segment should SparkPlace target? Or is there a single strategy that can capture the potential value of both types of customers without draining the company's resources? These questions are at the heart of this fictionalized case by Jill Avery, of the Simmons School of Management, and Thomas Steenburgh, of the University of Virginia's Darden School of Business. Expert commentary comes from regular HBR contributor Roger Martin, of the University of Toronto, and from Mike Volpe, chief marketing officer at HubSpot, the company on which SparkPlace is based.

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For teaching purposes, this is the commentary-only version of the HBR case study. The case-only version is reprint R1210X. The complete case study and commentary is reprint R1210K.

SparkPlace is a two-year-old business with a hot new product: software that manages and measures the effectiveness of permission-based marketing campaigns for social media. The company is in the process of deciding on which of two customer segments to focus its strategy. Each segment has demonstrable advantages, but developing the product for and marketing to both segments simultaneously could pose big challenges. Is the argument against being "all things to all people" a valid one? If so, which customer segment should SparkPlace target? Or is there a single strategy that can capture the potential value of both types of customers without draining the company's resources? These questions are at the heart of this fictionalized case by Jill Avery, of the Simmons School of Management, and Thomas Steenburgh, of the University of Virginia's Darden School of Business. Expert commentary comes from regular HBR contributor Roger Martin, of the University of Toronto, and from Mike Volpe, chief marketing officer at HubSpot, the company on which SparkPlace is based.

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No sales force consists entirely of stars; sales staffs are usually made up mainly of solid performers, with smaller groups of laggards and rainmakers. Though most compensation plans approach these three groups as if they were the same, research shows that each is motivated by something different. By accounting for those differences in their incentive programs, companies can coax better performance from all their salespeople. As the largest cadre, core performers typically represent the greatest opportunity, but they're often ignored by incentive plans. Contests with prizes that vary in nature and value (and don't all go to stars) will inspire them to ramp up their efforts, and tiered targets will guide them up the performance curve. Laggards need quarterly bonuses to stay on track; when they have only annual bonuses, their revenues will drop 10%, studies show. This group is also motivated by social pressure--especially from new talent on the sales bench. Stars tend to get the most attention in comp plans, but companies often go astray by capping their commissions to control costs. If firms instead remove commission ceilings and pay extra for overachievement, they'll see the sales needle really jump. The key is to treat sales compensation not as an expense to rein in but as a portfolio of investments to manage. Companies that do this will be rewarded with much higher returns.

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To maximize their effectiveness, color cases should be printed in color.

The key account manager of an engineering company has to convince a department to give up important contracts. The German engineering company Siemens had set up a global key account management program since 2010. The key account manager of an emerging account had been asked from his customer to cut the costs of two long-term contracts worth about €300 million that his customer had signed with Siemens. Although legally Siemens could refuse the revision, such an act could jeopardize Siemens' relationship with the customer. At the same time, a change in the contracts would bring about losses for Siemens. How should the key account manager handle this problem? He knew that he would have to be resourceful, given that he had no direct authority in the situation, but this was the nature of his job.

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This video contains an interview with David Murphy, CEO of Better World Books. Topics discussed include: the opportunities and constraints offered by having a social mission, an update on the company, and the future of Better World Books.

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